Middle East airlines ride on global trend

Dubai - Demand for air freight rose 4.3 per cent in June, the fastest rate for 14 months

Global demand for air travel rose 5.2 per cent in June and Middle Eastern carriers posted a 7.5 per cent traffic increase, according to the data released by the International Air Transport Association (IATA) on Thursday.
The demand in the Middle East was well down on the double-digit growth recorded earlier in the year. In part this could be owing to the timing of the holy month of Ramadan, which tends to depress traffic growth. Capacity rose 14.3 per cent, which caused load factor to dive 4.4 percentage points to 69.9 per cent in the region.
Globally, capacity measured in available seat kilometres rose faster than demand at 5.6 per cent, meaning that load factor - a measure of how full planes are - dropped 0.3 percentage points to 80.7 per cent.
"The demand for travel continues to increase, but at a slower pace. The fragile and uncertain economic backdrop, political shocks and a wave of terrorist attacks are all contributing to a softer demand environment," IATA director-general Tony Tyler said in a statement.
Asia-Pacific airlines' June traffic increased 8.2 per cent compared to the year-ago period. However, most of the growth relates to the strong upward trend in traffic seen in the final months of 2015 and into 2016, with June demand barely higher than in February.
European carriers saw demand rise 2.1 per cent, the smallest increase among regions, reflecting the negative impact of recent terrorism. While demand tends to recover reasonably quickly after such events, the repeated nature of the attacks may have a more lasting impact.
North American airlines' demand rose 4 per cent compared to June a year ago, which was well up on the 0.5 per cent year-over-year growth recorded in May.
Latin American airlines experienced an 8.8 per cent rise in demand compared to the same month last year, suggesting that carriers there have flown out of the soft patch seen in the first quarter
African airlines' traffic climbed 4.7 per cent in June, an indication that the strong upward trend in demand that began in the second half of 2015 has paused.
The Bottom Line: "The latest figures show that aviation and aviation related tourism delivers $2.7 trillion in economic impact and supports some 62.7 million jobs worldwide. It is a powerful force for good in our world. It is too soon to know whether recent terrorist attacks will have a long-term negative influence on demand, nor what will be the impact of Brexit and the events in Turkey. But it is vital that governments recognise and support aviation's ability to contribute to global economic well-being and better understanding across cultural and political borders," said Tyler.
 
Cargo demand up
Demand for air freight rose 4.3 per cent in June, the fastest rate for 14 months, according to the IATA. Capacity rose faster than demand, at a rate of 4.9 per cent, keeping yields under pressure.
IATA cautioned against reading too much into June's performance, given the prolonged downturn in cargo markets, which has forced air cargo companies to cut back fleets and seek new products and partnerships.
"Global economic growth remains sluggish, world trade volumes continue to trend downwards and the industry faces heightened uncertainty in the aftermath of the Brexit vote," IATA head Tony Tyler said.
- abdulbasit@khaleejtimes.com